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Steel stocks at highest in years, thanks to China

LiveMint 25-07-2017Livemint

Steel stocks are trading at the highest since 2011 and it’s mostly thanks to the industry’s biggest menace in recent years: China.

Demand in China, which produces half the world’s steel, has been surprisingly strong this year and the country closed some plants to ease a glut that had spread across the globe.

Naveen Kumar Sani/Mint

That’s led to a steep drop in exports, helping steel prices extend a recovery and pushing a Bloomberg gauge of global steel stocks up 45% in the past year.

Less supply coming out of China has helped prices in Europe and the US jump about 75% in the past 18 months.Bloomberg

Monetary easing not a silver bullet

Expectations that the Reserve Bank of India will cut its benchmark rate at its forthcoming policy meet in August are getting cemented everyday with incremental inflation data tipping the scales for a cut.

However, such a reduction is unlikely to make a material impact on growth, according to DBS Bank Ltd.

In a research note the bank said that what makes an impact is transmission.